Tobacco Clients Give Up Ads In AGs' Deal

WASHINGTON, D.C.--Forty state attorneys general have fashioned a comprehensive settlement with Big Tobacco that includes the most sweeping limits on advertising in its history.

After two months of negotiations, cigarette manufacturers agreed to ban all outdoor ads, the use of all color images such as the Marlboro Man and Joe Camel, and implement anti-smoking announcements. The cigarette makers also agreed to create a $300-billion fund to compensate disease victims in exchange for some legal immunity from future claims.

'Tobacco companies will stop marketing and advertising to our children,' Grant Wood, attorney general of Arizona, said Friday.

'The concept here is that if enough AGs band together when they don't like an advertising practice, like liquor advertising, they can create a settlement that no court would uphold,' said Doug Wood, executive partner of Hall Dickler Kent Friedman & Wood, an advertising law firm in New York.

Tobacco companies spent about $658 million last year on advertising and promotions, according to Competitive Media Reporting.

'These restrictions, as we understand them, are much worse than the FDA rule,' said John Fithian, counsel to the Freedom to Advertise Coalition here. 'We, the advertising industry, will subject the proposal to a First Amendment challenge,' he added.

Dan Jaffe, senior vice president of the Association of National Advertisers, said, 'It is not until Congress acts that we will really know what will happen.'

The ad industry will be allowed to challenge the settlement only if the proposal becomes an act of Congress and the deal is no longer a voluntary effort on the part of tobacco companies in exchange for limited immunity. The attorneys general, however, will try to keep the pact out of the courts.

Senate majority leader Trent Lott said that he may have some problems with the deal, and that Congress would not get to it until September. The White House said it would subject the pact to scrutiny.